The High Court has temporarily halted the proposed Sh340 billion sale and transfer of Diageo Plc’s controlling stake in East African Breweries PLC (EABL) to Japan’s Asahi Group Holdings Limited.
The court’s recent decision by Justice Josephine Mongare of Machakos High Court is a dramatic reversal of fortune for the high-profile deal after four consecutive failed attempts to halt it in Nairobi courts this year.
Justice Mongare issued the interim orders restraining the Competition Authority of Kenya (CAK), Diageo Kenya Limited, and three other respondents stopping any steps toward completing the transaction pending the hearing of a petition filed by Christine Irungu.
“In the interim and pending the inter partes hearing and determination of this Application, a conservatory order is hereby issued restraining the 1st, 2nd, 3rd and 4th Respondents, whether by themselves, their directors, officers, agents, servants, employees, subsidiaries, affiliates or any person acting on their behalf, from completing, implementing, registering, approving, transferring, disposing of or otherwise giving effect to the sale and/or transfer of Diageo’s controlling interest in East African Breweries PLC to Asahi Group Holdings Limited,” Justice Mongare ordered
Justice Mongare further ordered that the current ownership structure at EABL remain unchanged until the case is heard.
“A conservatory order is hereby issued preserving the ownership, control and shareholding status quo in East African Breweries PLC as regards the CAK and Diageo Kenya Limited controlling interest therein,” She ordered.
Judge Mongare further certified as urgent a petition filed by Irungu and directed that the application be served upon the respondents within seven days and fixed the matter for mention on July 2, 2026.
The recent orders come barely hours after the High Court in Nairobi dismissed a separate attempt by JILK Construction Company to stop the same transaction.
In that case, Justice Gregory Mutai of the Constitutional and Human Rights Division rejected JILK Construction’s application for conservatory orders, finding that the company’s grievances arising from a terminated 2017 Kisumu brewery construction contract had no connection to the proposed share sale.
“I share the same view as my brother Judge Bahati Mwamuye in the Bia Tosha matter, that no nexus has been shown between the impugned transaction and the petition now before the court,” Justice Mutai ruled.
JILK had argued that the acquisition should be suspended pending a human rights audit under the United Nations Guiding Principles on Business and Human Rights.
However, the court held that the principles did not have binding legal force capable of stopping the transaction.
Justice Mutai further held that public interest favored completion of the deal.
“In my view, public interest favors the conclusion of the transaction, as the transaction shall have a significant public finance impact,” the judge said, noting that the transaction could generate approximately Sh42 billion in Capital Gains Tax revenue.
The JILK case was one of several legal challenges mounted against the proposed acquisition this year.
Earlier, Bia Tosha Distributors, a former EABL distributor locked in a decade-old distribution rights dispute, had three injunction bids thrown out, the last as recently as June 2, when Justice Mutai dismissed its application, ruling that had elected to pursue relief at the Court of Appeal and could not return to the High Court to seek similar orders.
The transaction had been awaiting final approval from the Competition Authority of Kenya after reportedly receiving clearance from regulators in Uganda, Tanzania and Kenya’s Capital Markets Authority.
The transaction, valued at approximately $2.3 billion (Sh340 billion), would see Asahi acquire Diageo’s 65 per cent controlling stake in the Nairobi Securities Exchange-listed brewer.
The deal, announced in December 2025, had been awaiting final approval from the Competition Authority of Kenya after reportedly receiving clearance from regulators in Uganda, Tanzania and Kenya’s Capital Markets Authority.
The deal is expected to generate approximately Sh42 billion in capital gains tax for the Exchequer, making it one of Kenya Revenue Authority’s biggest single-transaction windfalls.
EABL had repeatedly told investors that completion was expected in the second half of 2026.
At the time of going to press, CAK, EABL and Diageo had not filed responses or issued public statements on the Machakos order.
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